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Feb 25, 2013
02/13
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this is the example of lehman brothers and bear stearns and merrill lynch, where no one knew how much risk they had on their books. it turns out they had all sorts of risk and nobody in the market knew or understood them. this is the big danger of business being done in an opaque fashion, in the dark, in a very complex nature. i would argue that ultimately you need to bring began pulling out of the dark room and bring it back into the light. in exchange, where everyone can see what is going on. to continue a little with the analogy. this is what i think is the most dangerous part of the way business is done on wall street today. the dealer. when you are playing blackjack, i think everyone knows the rules. if you get more than 21 you are bust. there are certain statistical probabilities you should and should not bet on. when you go to a casino, does anyone in the audience expect the dealer to give them bad information? for example, where the dealer is actually telling you when you are on 19 that you should take another card? no one would expect, at least when i have been to casinos, --
this is the example of lehman brothers and bear stearns and merrill lynch, where no one knew how much risk they had on their books. it turns out they had all sorts of risk and nobody in the market knew or understood them. this is the big danger of business being done in an opaque fashion, in the dark, in a very complex nature. i would argue that ultimately you need to bring began pulling out of the dark room and bring it back into the light. in exchange, where everyone can see what is going on....
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Feb 18, 2013
02/13
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it was the failure of bear stear stearns. that precipitated the acute crisis. and the second is what would be lost. are there valuable roles played when, for example, an underwriter also makes market insecurities which it underwrites. most people would conclude that there are. the third kind of example is embodied in your legislation and i think some other proposals. which focuses on the point that i tried to make at the close of my introductory oral remarks. that what i think of as the unaddressed set of issues. the unaddressed set of issues of large amounts of short-term, nondeposit, runable funding. and i think here and speaking personally now, my view is that's the problem we need to address. your legislation takes one approach to addressing it which is to try to cap the amount that any individual firm can have. and thereby try to contain the risk of amplification of a run. there are other complimentary ideas such as restricting the amounts based on different kinds of duration risk or having higher requirements if you have more than a certain amount. there
it was the failure of bear stear stearns. that precipitated the acute crisis. and the second is what would be lost. are there valuable roles played when, for example, an underwriter also makes market insecurities which it underwrites. most people would conclude that there are. the third kind of example is embodied in your legislation and i think some other proposals. which focuses on the point that i tried to make at the close of my introductory oral remarks. that what i think of as the...
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Feb 16, 2013
02/13
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they are at a leverage ratio of 400 to one, which makes bear stearns, lehman brothers, and the others pale in comparison. have you examined the report and the budgetary implications in your projections? >> let me say two things quickly. first, as you know, when you refer to a government bailout, there is no explicit action by the congress. it is simply the case that people do not pay back their mortgages, and when the fha is on the hook, taxpayers would have to pay that back. the second thing i would say is that as you know again, there's a few years of fha lending that has turned out particularly poorly in terms of delinquency and default rates. we have not done a separate projection of what a draw on the treasury might ultimately be. if there is a change, it would turn up as a credit we estimate in the budget, but we do not have a specific projection that i'm aware of -- it would turn up as a credit reestimate. we could take a closer look at it. i do not know that that is data we could get, but we could try. >> that would be very helpful to us as well. last question is with regard t
they are at a leverage ratio of 400 to one, which makes bear stearns, lehman brothers, and the others pale in comparison. have you examined the report and the budgetary implications in your projections? >> let me say two things quickly. first, as you know, when you refer to a government bailout, there is no explicit action by the congress. it is simply the case that people do not pay back their mortgages, and when the fha is on the hook, taxpayers would have to pay that back. the second...
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103
Feb 14, 2013
02/13
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that they are overleveraged right now at 400-1 which makes bear stearns and others pale in comparison. have you examined the f.h.a.'s report and the budgetary implications in your budgetary projections? >> first, as you know, when you refer to a government bailout, there is no explicit action by the congress, but it's the case that people don't pay back their mortgages and f.h.a. is on the hook. >> they have a line of credit due to the treasury and have to come to congress but congress can give them the money. did you take that into consideration? >> i would say, as you know again, but explain to others, there are a few years of f.h.a. lending that has turned out particularly poorly in terms of the delinquency and default rates and have not done a separate projection of what the draw on what the treasury might be if there is a change -- it would turn up as a credit re- estimate in the budget but don't have a specific projection that i'm aware of -- >> is that something that you could do and take a look at? >> i think we could take a closer look at. we have to talk more specifically an
that they are overleveraged right now at 400-1 which makes bear stearns and others pale in comparison. have you examined the f.h.a.'s report and the budgetary implications in your budgetary projections? >> first, as you know, when you refer to a government bailout, there is no explicit action by the congress, but it's the case that people don't pay back their mortgages and f.h.a. is on the hook. >> they have a line of credit due to the treasury and have to come to congress but...
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110
Feb 13, 2013
02/13
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that they are overleveraged right now at 400-1 which makes bear stearns and others pale in comparison. have you examined the f.h.a.'s report and the budgetary implications in your budgetary projections? >> first, as you know, when you refer to a government bailout, there is no explicit action by the congress, but it's the case that people don't pay back their mortgages and f.h.a. is on the hook. >> they have a line of credit due to the treasury and have to come to congress but congress can give them the money. did you take that into consideration? >> i would say, as you know again, but explain to others, there are a few years of f.h.a. lending that has turned out particularly poorly in terms of the delinquency and default rates and have not done a separate projection of what the draw on what the treasury might be if there is a change -- it would turn up as a credit re-estimate in the budget but don't have a specific projection that i'm aware of -- >> is that something that you could do and take a look at? >> i think we could take a closer look at. we have to talk more specifically and
that they are overleveraged right now at 400-1 which makes bear stearns and others pale in comparison. have you examined the f.h.a.'s report and the budgetary implications in your budgetary projections? >> first, as you know, when you refer to a government bailout, there is no explicit action by the congress, but it's the case that people don't pay back their mortgages and f.h.a. is on the hook. >> they have a line of credit due to the treasury and have to come to congress but...